Business Overview

Parking lots are located in places where street parking is limited and there is plenty of automobile traffic. Parking may be offered in exterior open lots or in interior secured garages.

Parking lots are found in commercial areas, next to airports, near hospitals, adjacent to schools, and near event spaces that attract a large crowd.

There are two facets in the parking lot business. One is the owning and operating the parking lots and the other opportunity is managing the parking lots on behalf of other owners.

Who is this business right for?

This business is an attractive investment opportunity for those investors with capital to invest in the leasing and/or acquisition of parking lots, who are looking for a long-term, fairly stable rate of return on the investment. The alternative is setting up a service company to manage the operation of the parking lot/services for other owners.

What happens during a typical day at a parking lot business?

Once setup, this business runs almost automatically. The business owner’s concerns are hiring staff and making sure the parking lot attendants show up on time to do their job. Another duty of the owner is to manage the cash deposits, get change from the bank, and create the accounting records for the daily proceeds.

What is the target market?

Parking lots are used by customers because of the convenience of parking near something else. The customers are those that drive by the parking lot.

How does a parking lot business make money?

Most parking lots make money by filling up the empty spaces with cars that pay an hourly rate or flat rate for the parking. Parking lots are especially profitable during peak traffic in larger cities. For example, many lots take advantage of the number of drivers in town during sports games and those attending other big events.

For a parking lot company that offers parking lot management services, they are paid a monthly fee that is based on the revenues produced by the parking lots they manage for other owners.

What is the growth potential for a parking lot business?

Many investor/owners start with a single parking lot and then invest in other lots to grow the business. Parking lot opportunities include commercial office buildings, retail operations, shopping malls, mixed-use facilities, hotels, valet services, arenas, stadiums, events, medical centers, and hospitals.

One large parking lot management company called Ace Parking started in 1950 with a single parking lot. The company has steadily grown since then. Ace Parking now manages 450 parking lots across America and employs more than 4,500 people.

In the Unites States, Statistic reports that there are over US $10 billion in revenues earned each year from parking lot operations. IBISWorld reports that there are over 10,000 parking lot businesses in the USA that employ close to 160,000 people. The top three companies in this industry control a large share of the total market, earning 37.6% of the total industry revenues each year. Small operators make up the remaining 62.4% of the industry and mostly cater to the local market demand for parking.

Besides Ace Parking, the other largest operators include ABM Industries Inc. and Central Parking Corp., which merged with Standard Parking Corp. during 2012.